The US dollar hit a four-year low against the euro before rebounding after the Federal Reserve cut interest rates by a quarter point, with two more cuts expected this year. Fed officials downplayed the risk of inflation from trade policies. President Trump called for a larger rate cut. The dollar gained support after Powell characterized the cut as a precaution.

The euro was 0.3% lower against the dollar at $1.18305, after rising to $1.19185. The dollar index was 0.3% higher at 96.926. US homebuilding and permits dropped in August. Analysts predict further dollar losses, but global growth factors could prevent a complete decline. The Canadian dollar weakened after Bank of Canada’s rate cut.

Sterling was up 0.08% at $1.36575, near 2-1/2-month highs. The dollar rose 0.1% against the yen. Bank of Japan is expected to keep rates steady. The focus is on Japan’s upcoming leadership change. Bitcoin was down 1% at $115,730.

Read more at Yahoo Finance: Dollar whipsawed as Fed delivers normal-sized rate cut